Next week will reveal important news regarding the Chinese economy. China's economy is one of the largest in the world, and information about it affects the whole world.
Tuesday 18.04 02:00 GTM, China Gross Domestic Product (GDP) YoY (Q1 2023)
GDP is an indicator that measures the value of all goods and services produced by the economy during the year, taking into account the effect of inflation on their value. It is a widely used measure of economic activity and a primary indicator of the health of the economy to assess a country's overall level of production and prosperity.
Despite strict Covid-19 controls and related production slowdowns, as well as the real estate market slump in China last year, GDP growth in Q4 2022 was higher than expected - 2.9% growth was reported versus an expected 1.8%. For Q1 2023, the current forecast remains unchanged from the previous quarter at 1.8%. The Chinese government's official GDP growth forecast for the whole of FY2023 was reported at 5%, while the IMF's recently announced growth of the Chinese economy was estimated at 5.2%.
Source: Tradingeconomics.com
A higher-than-expected reading should be taken as positive/bullish for the CNY, while a lower-than-expected reading should be taken as negative/bearish for the CNY.
Impact: CNY
Tuesday 18.04 02:00 GTM, China Industrial Production YoY (March)
Industrial production is a key indicator of economic activity that tells us about the value of output produced by industrial companies, mines and utilities. This measure considers the effect of inflation on the value of output, which means that changes in production are measured in inflation-adjusted values. In this way, industrial production is an important source of information for economists, politicians and other professionals involved in economic analysis. An increase in industrial production is usually considered a sign of economic growth and a key factor affecting residents' overall level of employment and income. On the other hand, a decline in industrial production may indicate problems in the economy, such as an economic slowdown or recession.
Last time the level was forecast to reach 2.6%, and the result came below expectations at 2.4%. The current forecast is 2.6%.
Source: fxstreet.com
A higher-than-expected reading should be taken as positive/bullish for the CNY, while a lower-than-expected reading should be taken as negative/bearish for the CNY.
Impact: CNY
Tuesday 18.04 09:00 GTM, Germany ZEW Economic Sentiment (April)
The Zentrum für Europäische Wirtschaftsforschung (ZEW), a German research institute, compiles an economic sentiment index that reflects the economic outlook over a six-month period. A value above zero indicates optimism, while a value below zero signals pessimism. The results are based on a survey of German institutional investors and analysts.
The last time the forecast was 17.1, the result achieved was only 13.0, which is considerably lower than the forecast number. It may be connected to the high level of uncertainties in the global financial markets. The current forecast also stands at 17.1.
Source: Tradingeconomics.com
A higher-than-expected reading may be taken as positive/bullish for the EUR, while a lower-than-expected reading may be taken as negative/bearish for the EUR.
Impact: EUR
Wednesday 19.04 06:00 GMT, U.K. Consumer Price Index (CPI) YoY (March)
The Consumer Price Index (CPI) is used to determine changes in the prices of goods and services to which consumers are exposed. It is an essential tool for tracking price trends and inflation, which makes it possible to observe changes in consumer buying habits.
As the UK has struggled with inflation remaining above 10%, the forthcoming report will show whether it has managed to fall below 10% in March, as forecasts suggest that inflation may be reported at 9.9%. It should be noted that the previous forecast for the CPI was also 9.9%, while the actual figure was 10.4%.
Source: ycharts.com
A higher-than-expected reading may be taken as positive/bullish for the GBP. In contrast, a lower-than-expected reading may be taken as negative/bearish for the GBP as it relates to a potential increase in interest rates.
Impact: GBP
Wednesday 19.04 09:00 GMT, Eurozone Consumer Price Index (CPI) YoY (March)
Eurozone CPI data, released on the same day, may show a different picture to that of the UK. The preliminary data for March, which came out on March 31, not only showed a significant fall in inflation compared with the previous month (6.9% compared with 8.5%), but it was also reported to be lower than the forecast of 7.1%. The forecast for the final CPI data for March is in line with the preliminary data.
Source: ycharts.com
A higher-than-expected reading may be taken as positive/bullish for the EUR. In contrast, a lower-than-expected reading may be taken as negative/bearish for the EUR as it relates to a potential increase in interest rates.
Impact: EUR
Stocks to watch
Charles Schwab (SCHW) announcing its earnings results for the quarter ending on 03/2023. Forecast: 0.9255. Positive earnings surprise in 6 out of the last 10 reports. Time: April 17, before the market opens.
Netflix (NFLX) announcing its earnings results for the quarter ending on 03/2023. Forecast: 2.88. Positive earnings surprise in 6 out of the last 10 reports. Time: April 18, after the market closes.
Tesla (TSLA) announcing its earnings results for the quarter ending on 03/2023. Forecast: 0.8569. Positive earnings surprise in 4 out of the last 10 reports. Time: April 19, after the market close.
IBM (IBM) announcing its earnings results for the quarter ending on 03/2023. Forecast: 1.26. Positive earnings surprise in 8 out of the last 10 reports. Time: April 19, after the market closes.
Procter&Gamble (PG) announcing its earnings results for the quarter ending on 03/2023. Forecast: 1.32. Positive earnings surprise in 9 out of the last 10 reports. Time: April 21, before the market opens.
Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service)
Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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